Consumer credit declined by 17.6% to N3.5 trillion in October 2024 from N4.25 trillion recorded in September, according to the Central Bank of Nigeria (CBN) latest report.
According to the report, the N750 billion decline was a result of reductions in both personal and retail loans during the period under review.
The CBN report stated: “Consumer credit outstanding declined by 17.64 percent to N3.5 trillion compared with N4.25 trillion at the end of the preceding month.”
The decrease in consumer credit was driven by a decline in personal loans, which fell by 23.5% to N2.41 trillion from N3.15 trillion in September. Retail loans also recorded a 0.91% decline from N1.1 trillion to N1.09 trillion.
Despite the monthly contraction, personal loans continued to account for the majority of consumer credit as they constituted 68.95% of the total consumer credit in October.
However, this was a reduction from 74.14% recorded in the preceding month.
“Personal loans maintained its dominance, accounting for 68.95 percent of total consumer credit, albeit lower than the 74.14 percent in the preceding month, while retail loans constituted the balance,” the CBN added.
While consumer credit saw a month-on-month decline, it recorded a year-on-year (YoY) growth of 6.06%, suggesting a broader expansion in credit availability over the longer term.
The latest figures revealed a shift in consumer borrowing patterns and showed a possible cautious stance and potentially tighter lending conditions within the financial sector.
Analysts suggest that the decline in consumer credit may be linked to macroeconomic challenges like the current high inflation rate and higher interest rates.
